[E-commerce Insights] New to Online Retail? 4 Key E-commerce Tips

Publish Date:2023-07-29

The trend of online shopping continues to grow. Can you keep up? While the concept of “e-commerce” has been around for over 30 years, according to statistics and forecasts from eMarketer published in early 2021, e-commerce continues to show sustained growth. It is estimated that by 2024, global e-commerce sales will reach nearly $6.4 trillion (about HKD 50 trillion), accounting for one-fifth of total retail sales.

Looking specifically at the Hong Kong market, data from the Census and Statistics Department indicates that the proportion of people aged 15 and above who shopped online in the past year increased from 35.8% in 2018 to 46.8% in 2022. Among them, individuals aged 25 to 34 have the highest online shopping rate, reaching 80%. The main online shopping categories include daily necessities, clothing and footwear (82.9%), food and beverages (43.4%), takeaway food (37.9%), and ticket bookings (11.6%).

Despite the competitive landscape, e-commerce remains a growing industry worldwide. If you’re looking to further develop and succeed in the online market, the following business tips may be helpful:

Tips 1 :Running an Online Store – Choosing the Right Products is Crucial

In the competitive e-commerce market, selecting reliable and trustworthy sources for your products is crucial for successful online store management. As the market grows, opting for niche or high-repurchase-rate products becomes even wiser. Additionally, shipping costs are a significant factor; it’s advisable to avoid large-volume, cheap items that lack competitiveness, as shipping these items may result in slim profit margins.

Furthermore, the “thin profit, high sales” strategy is only viable for companies with substantial brand influence. Therefore, it’s essential to maintain a keen awareness of “net profit” during marketing and traffic acquisition, preventing situations where advertising costs outweigh long-term profitability.

Aside from the quantity of products, the uniqueness and selling points of your items are crucial for successful management. As the number of products in online stores increases, customers’ patience for browsing through numerous options decreases. Therefore, it’s essential to evaluate the features of your products to attract customer attention and improve conversion rates.

When choosing products, inventory issues should also be considered, especially for items with limited shelf life. Monitoring inventory turnover rates regularly and managing stock appropriately can save warehousing costs and achieve cost-effectiveness.

Given the impact of the pandemic, online shopping for cosmetics, skincare, and health supplements has seen the most significant increase. Considering this trend could be a strategic entry point into the e-commerce market.

Tips 2:Marketing and Traffic – I Want It All

Regardless of the e-commerce platform, acquiring high-quality and cost-effective traffic has become increasingly challenging. In the initial stages, content marketing effectively attracts traffic and customers. However, as operations progress, advertising becomes a necessary cost. It’s advisable to initiate advertising efforts alongside content marketing to build brand awareness. Ensuring product quality and avoiding negative reviews are crucial, as customers compare options, and positive reviews can drive initial visits and brand development.

Personalized marketing strategies and increasing customer loyalty are also vital. According to Gartner Group analysis, 80% of future revenue will come from 20% of existing customers. Therefore, retaining existing customers and improving repurchase rates are crucial for success. Providing exclusive discounts for members, increasing purchase quantities, setting discount thresholds, and offering special promotions can increase the average customer transaction value, thereby boosting overall performance.

Tips 3:Boosting Average Transaction Value

In online store management, the formula for calculating revenue is simple: “Revenue = Traffic x Average Transaction Value x Conversion Rate.” Therefore, increasing the average transaction value is another key aspect. To encourage customers to checkout with more items, consider the following:

  • Increase Purchase Quantities:Encourage consumers to buy more by offering incentives such as “Buy One, Get One Half-Price,” similar to the strategy used by bubble tea shops.
  • Raise Free Shipping Thresholds:Set higher free shipping thresholds, such as HKD $350 or HKD $500. Consumers may be willing to increase their purchase quantity to qualify for free shipping.
  • Product Bundles:Introduce bundled product packages with discounted prices to entice consumers to try multiple products, thereby increasing the overall purchase amount.
  • Discounts or Special Offers for Meeting Thresholds:Provide discounts or reduced prices for reaching specific spending thresholds. Consumers appreciate discounts and may increase their purchase quantity accordingly.
  • Member Exclusive Discounts:Attract customers to become members by offering initial membership discounts or perks such as free shipping or special discounts after reaching a certain number of purchases.
  • Installment Payments:Offer installment payment options for orders that reach a certain amount, making expensive items more accessible for budget-conscious consumers.
  • Pre-checkout Upsell Options:In the website design, provide customers with options to add more items before checkout, enticing them to increase their purchase.

Tips 4:Scale Order Fulfillment, Optimize Logistics Support

In online store management, focusing solely on surface-level efforts won’t lead to long-term profitability. A successful online business requires robust logistical support, including warehouse management, logistics operations, financial flow control, and excellent customer service. These critical support measures are essential for enhancing customer satisfaction and ensuring that online merchants can efficiently handle large orders with confidence, focusing on business growth.

In this fiercely competitive e-commerce market, online merchants need to overcome various challenges, such as increasing customer conversion rates, boosting average transaction values, and attracting more loyal customers. These goals rely on a robust logistical operation to ensure smooth delivery of all products to customers and maintain a positive shopping experience. This is precisely what DBEE Cloud Warehouse Management Service aims to provide.

We are delighted to introduce DBEE’s Cloud Warehouse

Management Service, a solution crafted by our team based on extensive experience in e-commerce, logistics, and software development. We understand that for small and medium-sized enterprises, establishing an efficient supply chain is a critical challenge, especially when you want to focus on developing your core business and expanding your business footprint. DBEE’s Cloud Warehouse Management Service aims to simplify everything. Whether you operate in a B2B, B2C, or B2B2C model, and whether you’re a large enterprise or a startup, we can provide personalized support. Inspired by the Fulfillment By Amazon (FBA) model of e-commerce giant Amazon, we allow you to concentrate on the core aspects of your business, such as product development and sales promotion, while we handle the intricate warehouse operations and logistics.

Whether you have a standalone online store or operate on different sales platforms simultaneously, we offer personalized cloud warehouse management solutions, ensuring your inventory reaches consumers promptly. You can easily monitor inventory status, manage orders, track logistics information in real-time, and enjoy the convenience of a digital nomad mode, all based on cloud-based business management that eliminates fixed costs and makes your business more competitive.

At DBEE, our vision is to empower small and medium-sized enterprises with top-notch e-commerce supply chain support. We are committed to providing the best cloud warehouse management solutions to help you achieve your business goals and dreams. Let’s collaborate and create a high-quality e-commerce supply chain, opening up a broader path for development.If you have any questions, feel free to contact our operations consultants or visit www.dbee.hk for more information. We are dedicated to serving you wholeheartedly.


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